BASSETERRE, St. Kitts (SKNIS) – A week after releasing several glaring examples of mismanagement under the former Dr. Timothy Harris-led Unity administration, Prime Minister the Honourable Dr. Terrance Drew returned to the airwaves today, Wednesday, August 23, to reveal other instances of poor management practices that took place in Government between 2015 and 2022 that negatively impacted critical institutions in St. Kitts and Nevis. The prime minister said that his administration is addressing the poor financial management practices of the previous administration.
On Thursday, August 17, Prime Minister Dr. Drew reported to the nation that the Development Bank of St. Kitts and Nevis had borrowed close to $120 million from Social Security and that the bank was not in a position to service that debt.
Speaking on Freedom FM’s Issues Programme today, Wednesday, August 23, 2023, the honourable prime minister revealed the findings of a forensic analysis that showed the full extent of the bad situation of the Development Bank under the Timothy Harris-led administration.
“We know that no audit took place in the bank in 2018. If you are running a prudent financial institution, you must do audits, so even that alone tells you that if one has an institution and that institution is supposedly run well, one of the most important requirements is that an audit is done, and the bank had not been audited,” Dr. Drew said.
The finance minister said the poor management policies of the aforementioned past administration resulted in the accumulation of a debt of more than a quarter billion dollars; $120 million of which is owed to Social Security.
“The bank owes $334 million, well over a quarter billion dollars under the last administration. The Government is also owed by the bank. The bank owes the Government $89,500,000—ninety-something percent from the previous administration; National Bank – $25 million, which is a total from the last administration. We have not gone to the National Bank for any money. The SIDF is owed $57 million and PetroCaribe $11 million. So, they were taking money from a lot of other places because they could not go to international and regional institutions to borrow because of bad practice and lack of transparency and the fact is that they refused to do an audit, so, the Development Bank was in serious trouble,” Dr. Drew explained.
In addition to the Development Bank, Prime Minister Drew said the Dr. Harris-led administration also had a practice of utilizing Social Security in the manner of a slush fund and that “they misused and abused the fund by refusing to repay the money to the fund but we have now stopped all of that because, at the end of the day, you cannot put Social Security in trouble.”
Dr. Drew added, “In order to keep up with any other programmes that could not be sustainably funded, they were diverting money to other places, and people had the impression that Government had all this money. But see who were suffering—Social Security was suffering, Development Bank was suffering, other banks were suffering, and as a result of that the very foundation of our system was also suffering to the point where we ran a deficit in 2021-2022. The issue that I had is that they were claiming that there was surplus after surplus after surplus, only to find that there was a deficit and so we had to plug that leak as well.”
The Government of St. Kitts and Nevis, shortly after assuming office in 2022, resumed payments of $200,000 per month to Social Security in service of the Development Bank’s debt. It then quickly increased its monthly payments to $250,000 and is now in the process of increasing that amount to $300,000. The aim, according to Prime Minister Dr. Drew, is to have the monthly payments to Social Security brought up to $400,000 per month.